Zlotnick v. Premier Sales Group, Inc., 06-13305 Non-Argument Calendar.

• Decision Date: 19 March 2007
• Docket Number: No. 06-13305 Non-Argument Calendar.,06-13305 Non-Argument Calendar.
• Citation: 480 F.3d 1281
• Parties: Philip A. ZLOTNICK, Plaintiff-Appellant, v. PREMIER SALES GROUP, INC., Boynton Waterways Investment Associates, LLC, Panther Real Estate Partners, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

480 F.3d 1281

Philip A. ZLOTNICK, Plaintiff-Appellant, v. PREMIER SALES GROUP, INC., Boynton Waterways Investment Associates, LLC, Panther Real Estate Partners, Inc., Defendants-Appellees.

No. 06-13305 Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

March 19, 2007.

Eric Allan Lee, Lee & Amtzis, P.L., Boca Raton, FL, for Zlotnick.

Paul J. Schwiep, Coffey Burlington LLP, Miami, FL, Elliot H. Scherker, Paul R. Lipton, Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, FL, Susan Fleischner, Greenberg Traurig, PA, West Palm Beach, FL, for Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before DUBINA, CARNES and HULL, Circuit Judges.

HULL, Circuit Judge:

Plaintiff Philip A. Zlotnick appeals the district court's order dismissing his suit against Premier Sales Group, Inc. ("Premier"), Boynton Waterways Investment Associates, LLC ("Boynton Waterways"), and Panther Real Estate Partners, Inc. ("Panther"), filed pursuant to the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. Ann. §§ 501.201.213. After review, we affirm the dismissal of Zlotnick's complaint for failure to state a claim.

I. BACKGROUND

On February 23, 2005, Zlotnick, a citizen of Maryland, signed a reservation agreement with Boynton Waterways, a citizen of Florida, for a unit in a condominium complex to be built in Boynton Beach, Florida. The reservation agreement provided that payment of a $15,000 reservation deposit "expresses Purchaser's interest in purchasing Unit No. 207N (the `Unit') in the proposed condominium . . . at a purchase price of $310,000." The reservation agreement then stated that Boynton Waterways "assures that the foregoing purchase price will be the purchase price in the contract for the sale and purchase of the Unit (the `Contract') submitted to Purchaser."

The reservation agreement also gave both Zlotnick and Boynton Waterways the option of canceling the agreement at any time prior to entering a purchasing contract, as follows:

Purchaser may cancel this Reservation Agreement by notifying Seller or the Escrow Agent in a signed writing at any time before Purchaser signs the [purchase contract] . . . . Before both Purchaser and Seller sign and deliver the [purchase contract], Seller may cancel this Agreement for any reason whatsoever, by giving written notice thereof to Purchaser and Escrow Agent, in which event the Reservation Deposit, together with any interest thereon, shall be returned to Purchaser, and thereafter Purchaser shall have no claim of any kind against Seller.

Moreover, the agreement states, "Purchaser recognizes that this Reservation Agreement is a reservation solely with respect to a proposed condominium; and, accordingly, this Reservation Agreement is not an agreement to sell the Unit, nor does it confer any lien upon or interest in the Unit or on the proposed Condominium property."

Zlotnick paid the reservation deposit, which was held in escrow in accordance with the reservation agreement's terms. On May 2, 2005, the contracts administrator for the condominium complex supplied Zlotnick with a copy of the reservation agreement and indicated that the purchase contracts would be completed by early June 2005.

On December 22, 2005, Boynton Waterways sent Zlotnick a letter stating that because of "meteoric increases in construction costs . . . . in tandem with worsening labor and material shortages resulting from Hurricanes Katrina, Rita and Wilma," Boynton Waterways could not build the condominium development at the original reservation prices. As a result, Boynton Waterways canceled all reservation agreements, including Zlotnick's, and returned all deposits. The letter stated, "effective as of the date hereof, your Agreement is hereby terminated and is deemed null and void."

On January 6, 2006, Boynton Waterways sent Zlotnick another letter announcing the reopening of the condominium sales center. The letter indicated that Zlotnick had an exclusive ten-day window to purchase the same unit he had previously reserved at the price of $370,000, a $60,000 price increase over the amount set in the 2005 reservation agreement. Zlotnick alleges that Boynton Waterways sent similar letters to all previous reservation holders for the 318 units at the condominium complex.

On January 27, 2006, Zlotnick filed a class action complaint in federal district court under the FDUTPA on behalf of the previous reservation holders at the condominium complex. The complaint alleged that Boynton Waterways; Panther, a Florida-based real estate development company affiliated with Boynton Waterways; and Premier, a Florida-based company that marketed the condominium complex, solicited deceptive reservation agreements to secure financing and then terminated the reservation agreements with the sole purpose of reaping the benefits of a rising real estate market.

Boynton Waterways, Panther, and Premier timely filed motions to dismiss for failure to state a claim. A copy of the reservation agreement was attached to the complaint, and the parties at this point do not dispute the facts in the case. After hearing oral arguments on the motions, the district court granted the motions to dismiss on May 10, 2006. See Zlotnick v. Premier Sales Group, Inc., 431 F.Supp.2d 1290, 1296 (S.D.Fla.2006).

Zlotnick timely appealed.

II. DISCUSSION

The FDUTPA declares that "unfair or deceptive acts or practices in the conduct of any trade or commerce" are unlawful. Fla. Stat. Ann. § 501.204(1). Pursuant to § 501.211, any person who has suffered losses as a result of a violation may commence a private action to recover actual damages, attorney's fees, and costs. Fla. Stat. Ann. § 501.211(2). The Florida Supreme Court has noted that "deception occurs if there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment." PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So.2d 773, 777 (Fla.2003) (quotation marks and citation omitted). This standard requires a showing of "probable, not possible, deception" that is "likely to cause injury to a reasonable relying consumer." Millennium Commc'ns & Fulfillment, Inc. v. Office of the Att'y Gen., 761 So.2d 1256, 1263 (Fla.Dist.Ct.App.2000).

Zlotnick claims that the defendants schemed to circumvent the statutory requirements in Fla. Stat. Ann. § 718.502(2)(c) governing condominium reservation agreements by canceling the reservation agreements and then offering the same units at a higher price. See Fla. Stat. Ann. § 718.502(2)(c) (listing terms that must be included in reservation agreements). We conclude that these allegations do not state a claim under the FDUTPA and affirm the district court's grant of the motions to dismiss.¹

It is clear that Zlotnick's reservation agreement meets all statutory requirements under Florida law. The only statutory provision at issue is the requirement that a reservation agreement must include a statement "that the purchase price represented in . . . the reservation agreement will be the price in the contract for purchase and sale or that the price represented may be exceeded within a stated amount . . . or that no assurance is given as to the price in the contract for purchase or sale." Fla. Stat. Ann. § 718.502(2)(c)(4).² Here, the reservation agreement states, "[s]eller assures that the foregoing purchase price will be the purchase price in the contract for the sale and purchase of the Unit . . . ." This statement almost mirrors the language of Fla. Stat. Ann. § 718.502(2)(c)(4). In his reply brief, Zlotnick concedes that the reservation agreements are valid.

However, Zlotnick argues that although the reservation agreements may have been facially valid, the defendants' scheme flouted the intent of Fla. Stat. Ann. § 718.502(2)(c)(4) by canceling the reservation agreements in order to increase prices above the price established in those initial agreements. He contends that the circumstances surrounding the reservation agreement would have misled a reasonable purchaser into believing that the purchase price listed in the reservation agreement would not be changed.

The express terms of the reservation agreement undermine Zlotnick's claim, however. First, the language of the reservation agreement is clear on its face that it only expressed Zlotnick's "interest" in purchasing a specific unit and did not constitute a guaranteed purchase contract. The reservation agreement stated that it "is not an agreement to sell the Unit, nor does it confer any lien upon or interest in the Unit or on the proposed Condominium property." Furthermore, Florida courts treat reservation agreements as mere "agreements to agree," not as binding purchase contracts. See Portell Int'l Realty, Inc. v. Jacobson, 802 So.2d 431, 433 (Fla. Dist.Ct.App.2001).

Additionally, the reservation agreement gave Boynton Waterways an opportunity to "cancel this agreement for any reason whatsoever" at any point prior to entering a purchase contract.³ While the agreement provided that "[s]eller assures that the foregoing purchase price will be the purchase price in the contract for the sale and purchase of the Unit," there are no assurances that the purchase price would remain the same if Boynton Waterways canceled the reservation agreement. In light of the broad cancellation provision and express terms indicating that the agreement conferred no interest in the proposed condominium unit, no reasonable purchaser would believe that the reservation agreement set a binding purchasing price unless the agreement was still in effect when a purchase contract was delivered.

Zlotnick argues that despite the plain language in his reservation agreement, Boynton Waterways engaged in a deceptive trade practice under Fendrich v. RBF, L.L.C., 842 So.2d 1076 (Fla.Dist.Ct.App. 2003). In Fendrich, a prospective purchaser entered a reservation...